Brown talks of a new cut in interest rates

Brown talks of a new cut in interest rates
Gordon Brown hinted at another emergency global interest rate cut yesterday.

Brown: Lower inflation means cwentral banks can cut rates

The signal came amid fears that UK unemployment is set to soar to almost three million.

The Prime Minister promised 'co-ordinated action' across the world as pressure grew on the Bank of England to slash the cost of borrowing by up to 1% this week.

However, many experts warn that a rush to cut rates is 'too little, too late' because Britain is already in what is predicted to be a long and deep recession.

Mr Brown, speaking on a four day tour of Gulf states, indicated that he wants to see aggressive interest rate cuts.

'Now that inflation is brought under control we are going to see, as we have seen, two cuts in interest rates, and I believe that the trend around the world… is to respond to the falling oil price and the falling food prices that we're seeing at the moment,' the Prime Minister said.

Six central banks, including the Bank of England, cut interest rates by half a percentage point last month in an effort to shore up the global economy.

Mr Brown suggested yesterday that further co-ordinated cuts could be negotiated at a summit of world leaders later this month.

'I think what we're seeing round the world is an ability also to come together,' he told the BBC's Andrew Marr programme.

'We've got co-ordinated action… that's what this November 15 meeting is about.'

As economic bad news continued to pile up, accountants Deloitte forecast a significant rise in unemployment.

City economist Roger Bootle predicted 2.9m Britons will be out of work by the end of 2010, up from the current 1.79m.

However, Mr Brown claimed victory yesterday in his bid to persuade wealthy Gulf nations to pump more cash into struggling economies.

The Prime Minister has been trying to encourage Saudi Arabia and other oil-rich countries to inject money into the International Monetary Fund so it can help states threatened by the global economic downturn.